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Nasdaq hit record as Powell stays on rate-hike course

NEW YORK (Aug 24): The benchmark S&P 500 and the Nasdaq hit all-time highs on Friday after Federal Reserve Chair Jerome Powell said the central bank's current approach to interest rate hikes were the best way to protect the US economic recovery.

Gradual rake hikes are also the best way to keep job growth as strong as possible and inflation under control, Powell said. His comments did little to change market expectations of a rate hike in September and perhaps again in December.

"The Fed is very confident in the US economy, and Powell is indicating the Fed has no intention of slowing down rate hikes and it appears they are going to be looking past trade concerns for now," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte.

"We are seeing some of the more cyclical sectors like energy and materials continuing to move higher on the expectation that the Fed is going to let the economy run a little hot."

A dip in the dollar after Powell's comments helped lift oil and metal prices. The energy sector jumped 1.27 percent, the most among the 11 S&P sectors. The materials sector gained 1.1 percent.

Economic data also boosted sentiment. New orders for key U.S.-made capital goods increased more than expected in July and shipments growth held firm, the Commerce Department said.

At 11:13 a.m. EDT the Dow Jones Industrial Average was up 121.78 points, or 0.47 percent, at 25,778.76, the S&P 500 was up 14.87 points, or 0.52 percent, at 2,871.85 and the Nasdaq Composite was up 63.60 points, or 0.81 percent, at 7,942.05.

If the S&P ends the session above its Jan 26 record close, that would confirm the benchmark index's longest-ever bull-market run.

Only two of the 11 major sectors were lower. The rate-sensitive utilities sector fell 0.16 percent and the consumer staples index 0.20 percent.